Wednesday, December 17, 2008

In slightly less important news, the European Parliament has also voted to 'allow' Britain to keep its imperial measures and abandoned its battle to standardise metric measurements. UK Europe Minister Caroline Flint got straight in there and declared it a “victory for common sense”.

We wonder what she'll make of the EP's other momentous decision today? Another victory? Or maybe an admission the European Parliament is shockingly out of touch… who knows.

Maybe Caroline will declare there is no "common sense" in preventing workers from adapting their working hours as they see fit.

Or maybe she'll just go on drinking the European Parliament's kool-aid.

Well, it’s not dead quite yet, it's just that MEPs have beaten it to a pulp. The UK Government could in theory still save it during the so-called ‘conciliation’ stage, but without a veto, that's gonna be difficult.It's helpful to see which MEPs joined in the assault by adopting amendments from Socialist Spanish MEP Alejandro Cercas. A list can be found here:http://www.openeurope.org.uk/research/meps.doc

UK MEPs are in red. Interesting to note the number of EPP members (the Conservatives' 'friends' in Europe) voting with Cercas...

Tuesday, December 16, 2008

Tomorrow a very important vote takes place in the European Parliament. MEPs are due to take a decision on whether or not Britain keeps its opt-out from the EU's 48-hour working week.

It could be immensly embarrasing for the Government. Earlier this year, it ended years of opposition to the Agency Workers Directive - which restricts flexible working arrangments in the UK - apparently in return for retaining the opt-out on working time.

But MEPs - in particular Labours' - are now threatening to bulldoze that and vote to end the opt-out. If that happens, then the Government really is in a corner - since the issue will then be voted on in the Council... by a qualified majority.

Apart from the obvious and extremely far-reaching impact of the vote on the economy (as we've quantified today) this is also a classic example of how political agreements and backroom 'deals' in the corridors of Brussels are often not worth the paper they're written on.

As David Yeandle, Head of Employment Policy at the Engineering Employers Federation, told an Open Europe event last week: “With Europe, you think you’ve won, but then you haven’t".

A vote against the retaining of the opt-out tomorrow will send a clear warning to the Irish as they digest the 'political commitments' agreed last week on the Lisbon Treaty: they're not a guarantee - far from it.

Friday, December 12, 2008

The Irish Times reports that the conclusions from the Council meeting on the 'Irish situation' have been finalised. The conclusions are meant to give the Irish assurances on retaining a Commissioner, on neutrality, abortion and taxation. The draft conclusions made clear that EU leaders want the Treaty to come into force by January 2010, with a referendum likely to be held in autumn 2009 - after the European elections.

Speaking at a press conference in Brussels at lunchtime Taoiseach Brian Cowen said: "On the basis of today's agreement ... I am prepared to go back to the Irish people next year." Nicolas Sarkozy celebrated the fact that “The Irish will be consulted again".

Europe's - and Mr Cowen's - impatience with Ireland's voters have revealed a basic misunderstanding of democracy next to which the EU's other problems pale. Europe can and must thrive as a coalition of the willing. That is not what the Lisbon treaty promises to build.

A re-run vote on the already rejected Treaty is hardly a surprising outcome. But, equally expected, these 'assurances' are riddled with uncertainties. The exact legal nature of the assurances now needs to be sorted out, which will take us well into 2009.

What EU leaders absolutely want to avoid is having to re-ratify the Treaty in each member state, which would need to happen if anything in the Treaty changes. Adding a legally binding protocol to the Lisbon Treaty, for instance, changes the content of the Treaty, effectively making it a new Treaty requiring re-ratification in all 27 member states. At the same time, the Irish obviously cannot be seen as voting again on the exact same text as in June. The solution must lay elsewehere. So how do you change a Treaty without changing the actual Treaty? That is an equation that should not add up, at least according to all known laws of logic.

But this is EU politics, remember.

According to EUobserver, Nicolas Sarkozy said today that a protocol will be added to the Croation accession treaty. Sarkozy said:

"To give a legal value to the engagements made to Ireland by the 26 other member states, we have committed that at the time of the next EU enlargement – whether that will be in 2010 or in 2011, when probably Croatia will join us ... we will use that to add a protocol [on Ireland] to Croatia's accession treaty,"

If this was to happen, the Irish would hold a referendum next year based on future concessions.Still, the details are very unclear - on Ireland retaining the Commissioner, for instance. As pointed out by former EP President Pat Cox in today's Irish Times:

A key concession is the European Council's unanimous agreement to allow each member state to nominate a commissioner in perpetuity. This concession does not require a change to the Lisbon Treaty, which already provides the European Council with the right to decide the number of commissioners, subject to unanimity.

The Council could simply agree on this by means of unanimity - but how such an agreement would be 'legally guaranteed' is unclear. For the other issues, the precise formulation and legal implications of the "guarantees" remain anyone's guess. There is, of course, a general issue with protocols and EU treaties. As the House of Commons EU Scrutiny Committee has pointed out in regards to the UK's proposed protocols on the Lisbon Treaty - they're far from watertight. And unlike the Danes in 1992, the Irish will not get opt-outs per se, but rather 'clarifications' that their laws will not be affected by some presumptive future EU decisions in general policy areas.

Tony Barber points out, that there's also a risk for EU leaders here. The move would be perceived - rightly in our minds - as EU leaders trying to sneak changes to the Treaty through the backdoor. There's a possible scenario, of course, that EU leaders in fear of a second No vote in Ireland, will find ways to insert the institutional changes of the Lisbon Treaty into the accession treaty.

And let's not forget, in 2010 the Tories could well be in power in the UK with everything that that implies.

It's important to keep in mind, adding such protocols to the Croation accession treaty would not be the same changing-the-treaty-without-changing-it solution that the Danes got in 92/93 after their rejection of the Maastricht Treaty. The solution then was the so-called Edinburgh Agreement which laid down the Danish opt-outs in the areas of defense policy, justice and home affairs, the euro and union citizenship. However - bizarrely - this agreement between Denmark and the then 11 other EU member states was not formally a text either of the EU nor of the European Council - as pointed out by Cox in today's Irish Times.

The text was actually lodged with the UN in New York and was legally binding by virtue of being international law. It was then essentially codified by protocols in the Nice Treaty a few years later. The Edinburgh Agreement stated that the Danish opt-outs "are compatible with the Treaty and do not call its objectives into question." In other words, it did not change the content of the Maastricht Treaty. A few months ago the Irish reportedly consulted Danish legal experts on such a solution.

To a large extent, all of this is academic. The prevailing point is that the Irish are going to be asked to vote again on the entirety of the Lisbon Treaty - with all the loss of power and influence that entails. There is far more in there to object to than any of these 'guarantees' - legal or not - have a hope of covering. Technical and complicated discussion about protocols and declarations and opt-outs is an elite-flavoured distraction from the fact that Cowen, Brown, Sarkozy, Merkel and the rest of them simply will not take no for an answer. Depressing and predictable, but true.

Monday, December 08, 2008

A transcript of the meeting between Czech President Vaclav Klaus and senior MEPs at Prague Castle on Friday is reproduced on EUreferendum.

The exchange speaks for itself, but Bruno Waterfield correctly diagnoses the "staggering arrogance of MEPs who were, we must remember, guests in the official residence of the Czech head of state."

We've blogged on Peter Pan revolutionary Green MEP Daniel Cohn Bendit before, in particular regarding his swivel-eyed conspiracy theories on the supposed links between anti-Lisbon group Libertas and the US industrial-military complex. 'Danny the Red' remained true to this increasingly insane form during his exchange with Klaus on Friday:

I brought you a flag, which - as we heard - you have everywhere here at the Prague Castle. It is the flag of the European Union, so I will place it here in front of you.

Lisbon Treaty: I don't care about your opinions on it. I want to know what you are going to do if the Czech Chamber of Deputies and the Senate approve it. Will you respect the will of the representatives of the people? You will have to sign it.

I want you to explain to me what is the level of your friendship with Mr Ganley from Ireland. How can you meet a person whose funding is unclear? You are not supposed to meet him in your function. It is a man whose finances come from problematic sources and he wants to use them to be funding his election campaign into the European Parliament.

Saturday's Times had a rather interesting feature on US President elect Barack Obama and specifically his passion for basketball. The article offers a contrast to Britian's political leaders, and rightly notes that "it is hard to imagine Gordon Brown or David Cameron on the sports pitch, even in their youth." Attention is also drawn to the fact that Obama actually manages to "do a high-five on the court and not look as though he was a middle-aged geek trying to be cool." Again, a contrast is drawn to certain British politicans.

Slightly more relevant to the general theme of this blog, the article notes that American National Baskeball Association, the NBA, is hoping that Obama's victory will give the league a world-wide boost, including in the UK (where basketball enjoys very limited popularity - to put it mildly). The NBA hopes to set up a European division with teams in London, Barcelona and Berlin. But, the NBA's yearly 'draft' of young players - a set scheme under which the clubs recruit their players, usually from college teams - may violate the EU's employment laws. Although no further details are given in the article, this is said to represent an obstacle to the plans of establishing an NBA franchise in Europe.

So, do we here see a future trade row with basketball-loving Obama accusing the EU of enacting non-tariff barriers to prevent American companies (the NBA) to invest in Europe? Hardly. But, as ever, EU regulations work in mysterious ways.

On a seperate note, Obama actually has some decent skills. Open Europe's scouting report shows that he has a good left-hand jump-shot and a nice touch around the basket. However, he seems slightly one-handed (the equivalent of a footballer being one-footed, for those of you not familiar with basketball jargon). Neither does his 'hops' (jumping ability) seem to be what it once was. Still not bad for a 47 year old, also considering that he can 'bench' 200 lbs. In any case, he far outscores most European leaders on athleticism. Sarkozy's jogging rounds are just not quite the same, are they..?

The Irish Independent on Sunday carried a comment piece from Dublin Professor Colum Kenny, which criticised Irish politicians who have sought to lay the blame for the failure of the referendum on the Lisbon Treaty at the feet of the media, rather than accept their own failures to engage the public in a dialogue.

He writes, “The Committee on the Constitution seems to be angling to find a way to discourage broadcasters from giving equal time to both sides during referendum campaigns.”

But, as he points out, the media debate can be outweighed by symbolic messages, such as, “When the Taoiseach and the Irish EU commissioner both indicated that they had not fully read the Lisbon Treaty, they sent a symbolic signal of immense force to the electorate… voters were immediately freed to reject the document when even two highly-paid and highly-placed public figures -- who have access to highly qualified advisors -- appeared to find it incomprehensible.”

“The extent to which the legislative agenda of national parliaments is now largely set by EU initiatives and directives is not generally acknowledged by politicians. Voters might treat EU proposals with greater interest and respect if it were.”

He goes on to argue, “What is crucial from a communications perspective is a commitment by elected representatives to earn their considerable incomes and perks by working harder to convince the public of the benefits of Lisbon and the relevance of the EU. Don't blame the media, please, for a political failure.”

How refreshing to hear an argument for apportioning blame where it belongs, rather than attempt to scapegoat the media for failing to fall in line with a political agenda.

Friday, December 05, 2008

While the European Central Bank was busy cutting interest rates by 75 basis points on Thursday - its biggest move ever - our man in Brussels attended a roundtable discussing ten years living with the euro , with particular focus on the experiences of Spain and Portugal.

European Commission economist Carlos Martínez Mongay noted that both Spain and Portugal enjoyed boosts in their GDP before entering the Eurozone in 1999. However Portugal’s substantial growth stopped in 2000, while Spain's continued until last year.

He explained this by pointing to the better fiscal policies (budget surpluses) of Spain - in contrast to Portugal where reforms have been lagging behind for years. Also differences in labour market reforms played an important role. As Mongay showed, after 1999, the Real Effective Exchange Rate of Spain and Portugal was more or less the same.

Both countries experienced an increase of around 10%, but the reasons for the increase were much different. In Spain it was stronger productivity. In Portugal, on the other hand, the increase had its roots in the soaring cost of labour, meaning that the more profound labour market reforms in Spain explain discrepencies in the two otherwise rather similar countries.

What can we learn from this? Well, the obvious: that eurozone membership is by no means a paneca. A county's growth much depends on structural reforms. Or the lack thereof, such as in the case of Portugal. One can therefore not use the economic growth of Spain as an example of the blessings of the Euro.

And one must also look at the disadvantages of sharing a currency and central bank with 15 - soon to be 16 - other countries, some with fundamentally different economic circumstances to one's own. It has been reported, of course, that in Spain and Ireland, the European Central Bank's low interest rates fueled American-style housing bubbles, which now have burst. Spain is currently suffering from a shrinking economy and exponentially rising unemployment. Having your national interest rate set by others is a tricky business indeed.

Wednesday, December 03, 2008

The front page of the IHT this morning informs us that a row over dangerous levels of nickel and lead found in coffee has revealed that the European Commission has doled out a whopping €100,000 on luxury coffee machines for the upper floors of the Berlaymont building - so that top Commission officials don't have to queue with the plebs to get their morning fix.